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Trade Desk Shares Plunge After CEO Flags Tariff-Driven Pressure on Large Advertisers

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Trade Desk (TTD.O), the cloud-based advertising technology firm, faced its largest single-day stock drop on record Friday after CEO Jeff Green warned that ongoing tariff uncertainties are causing some of the world’s biggest advertisers to hold back on ad spending. The sharp decline threatened to erase nearly $16 billion from the company’s market value if losses hold.

Green highlighted that Trade Desk’s focus on large global advertisers makes it particularly vulnerable to economic pressures related to trade policies, contrasting with competitors that rely more on small and medium-sized businesses. The tariff-driven caution has led to a slowdown in launching new ad campaigns, especially in sectors most impacted by trade tensions.

Rosenblatt Securities analyst Barton Crockett noted that Trade Desk’s growth decelerated and underperformed Meta’s 22% growth, raising concerns that “closed gardens” like Meta’s platforms may be outpacing the open internet ad ecosystem that Trade Desk serves. Additionally, Trade Desk’s heavy exposure to large brands facing tariff pressures has added to investor concerns.

Despite the headwinds, the company projects current-quarter revenue of at least $717 million, roughly in line with analyst expectations. Still, at least 11 analysts have lowered their price targets on Trade Desk stock, bringing the median target down to $84.

Analysts at MoffettNathanson pointed out that as Trade Desk signs more brands to joint business plans, agencies might increasingly bring media buying in-house, posing another challenge.

On a leadership note, Trade Desk appointed Alex Kayyal as its new chief financial officer, effective August 21, succeeding Laura Schenkein.

Alphabet Shares Drop Amid Cloud Growth Concerns and Rising AI Spending

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Alphabet’s stock dropped by 8% on Wednesday, driven by investor concerns over the company’s slowing cloud growth and planned capital expenditures of $75 billion for the year. This marks a significant shift for the Google parent, highlighting fears surrounding the escalating costs of artificial intelligence (AI) development.

The company’s quarterly cloud revenue grew by 30%, slower than the 35% increase seen in the previous quarter, and missed market expectations. This decline mirrors challenges faced by its larger cloud rival, Microsoft. Analysts have indicated that these results mark a shift in Google’s business model, moving from its capital-light, high-margin search advertising business to a more capital-intensive, AI-driven approach.

The projected increase in capital expenditures (CapEx) for 2025 is 29% higher than analysts’ estimates. Alphabet has indicated that it will prioritize costly AI investments to avoid falling behind competitors, a strategy that has raised concerns among investors looking for a clearer path to AI-driven profits. Analysts such as Gil Luria from D.A. Davidson expressed worry that Alphabet might be heading down the same path as Microsoft, facing the challenges of high AI costs without immediate returns.

Alphabet’s concerns were further compounded by the rise of China’s DeepSeek, a low-cost AI model that has spurred debate about the high expenses of AI development by Big Tech companies. Despite better-than-expected ad revenue performance, the heightened CapEx and cloud struggles have overshadowed the positive results.

Analysts have responded to the concerns by cutting their price targets on Alphabet’s stock, with some expressing doubts about the company’s ability to capture a significant share of the cloud market. Alphabet’s shares remain the cheapest among the major U.S. cloud providers, with a 12-month forward price-to-earnings ratio of 22.7, lower than Amazon’s and Microsoft’s ratios.

 

Super Micro Shares Drop 22% After Financial Report Raises Investor Doubts

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Super Micro shares fell sharply by 22% on Wednesday, hitting their lowest level since May of last year after releasing an underwhelming financial update. The company, a prominent server manufacturer, has been struggling with internal and regulatory challenges, causing its stock price to drop to $21.55—down by 82% from its peak in March, effectively erasing approximately $57 billion from its market capitalization.

The decline in share value follows the resignation of Super Micro’s auditor, Ernst & Young, making it the second auditing firm to part ways with the company within two years. Super Micro has not submitted audited financial statements since May and faces the threat of being delisted from Nasdaq if it does not file its annual results with the SEC by mid-November. Despite issuing preliminary quarterly financial results, the company failed to offer a timeline for when it might file its annual financials.

During a recent call with analysts, CEO Charles Liang confirmed the search for a new auditor but declined to discuss Ernst & Young’s resignation or governance issues. Liang did, however, emphasize Super Micro’s commitment to resolving its overdue financial reporting. Analysts at Mizuho suspended their coverage of Super Micro due to the lack of comprehensive financial data, while Wedbush analysts noted that the latest update from Super Micro left “more questions than answers.”

For the quarter ending on September 30, Super Micro reported net sales between $5.9 billion and $6 billion, missing analysts’ expectations of $6.45 billion but marking a year-over-year increase of 181%. The company’s business has experienced significant growth due to demand for servers equipped with Nvidia’s processors designed for artificial intelligence applications. Nevertheless, analysts expressed concern about the December quarter’s forecast, which fell below estimates with anticipated revenue between $5.5 billion and $6.1 billion—lower than the projected $6.86 billion—and earnings per share of 56 to 65 cents, below the expected 83 cents.

Amid these financial challenges, Super Micro’s stock had previously soared due to high demand for its AI-driven servers, specifically those utilizing Nvidia’s latest GPU, Blackwell. CEO Liang indicated that Super Micro is ready to deliver Blackwell-based servers, but Nvidia’s limited chip supply has impacted shipments. CFO David Weigand reassured investors that Super Micro maintains a robust relationship with Nvidia, which has confirmed no changes in its GPU allocations to the company.

Additionally, Super Micro’s board has appointed a special committee to investigate Ernst & Young’s concerns regarding the company’s financial practices. Following a three-month review, the committee reported no evidence of fraud or misconduct but recommended several improvements in internal governance. Super Micro affirmed its commitment to implementing these recommendations and taking all necessary actions to maintain its Nasdaq listing.